Determinants of Tax Compliance Behavior in Presumptive Taxation:The Case of Dire Dawa City Administration

Abstract

In attempt to reverse the gap between public revenue and public good spending, many researchers had identified multi-faceted factors using Varity of tax compliance methods. However the issue is not yet clearly known in many countries including Ethiopia due to the limited and inconclusive results.  To further the understanding of tax compliance behavior in Ethiopia, this study examined the determinants of tax compliance behavior found in Dire Dawa Administration using behavioral model.The information randomly collected from299 was analyzed using both descriptive statistics and multiple regressions Model. In the study, we found that majority of the respondents have settled their tax liabilities without any penalty. However, poor services of tax authority, lower level of tax knowledge, and poor perception to government spending were challenges to tax compliance behavior. Thus we suggested improving tax knowledge and increasing the attitude of government spending help to raise the tax compliance behavior of individuals.

Keywords: Tax compliance; CDQ; Presumptive taxation; and Dire Dawa